Home Cryptocurrency Tokenomics for a Trustless and Long-Term Value Decentralized Network – Sponsored Bitcoin News

Tokenomics for a Trustless and Long-Term Value Decentralized Network – Sponsored Bitcoin News

by Serge Shlykov

Tokenomics is a concept that allows for the creation of the future blockchain architecture through its current design. It takes into account the possibility of new companies and future regulations that might need to be taken into account while the network is still in its early stages.

If property rights and security are the two main features of a network, then the network’s token may be considered the third most important aspect of the network. Unlike the two most important features, the value of the token doesn’t depend on the network itself. However, the token can be used to pay the transaction fees of the network and in return, the token holders get a share of the transaction fees and transaction records.

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sponsored by As with bitcoin, DeFi’s desire to build a fully decentralized global network is a fundamental source of its revolutionary features – distrust and the possibility of disintermediation. It is these two characteristics that constitute the essential value of DeFi and that underpin its long-term growth on the market. It is easy to understand why this is so:

  • On the one hand, the basic model of any DeFi project must be zero-based to create unlimited trust and demonstrate the value of a decentralized network beyond the market value of a single product or brand.
  • On the other hand, the decentralized network must also be disintermediated to compete with centralized products and maintain its core competencies.

A non-cooperative network is a naturally robust decentralized network model. Shield establishes a decentralized, non-cooperative, game theory derivatives exchange network of traders, dual liquidity pools, liquidators and brokers.

Shielded decentralised network based on non-cooperative game theory

The theory of non-cooperative play was first proposed by John Forbes Nash in 1950. It describes a multiplayer game system that is not limited to two people (i.e., a zero-sum game) and is stable once Nash equilibrium is reached. Before blockchain, most management systems of human society, including banks, stock exchanges, Internet majors, and social institutions, were based on zero-sum games. Zero-sum game systems pinned their hopes on a few centralized parties to organize or provide order in the fight against decay. However, a system of government based on zero-sum games is an unstable structure that shifts left or right according to the strength of the parties involved, a structure that from day one determines the convergence of power to the stronger party in the game, which always leads to collapse and restoration of order. The Shield protocol is one such non-cooperative game network, as shown in this diagram: Tokenomics for a Trustless and Long-Term Value Decentralized Network – Sponsored Bitcoin News Shield’s decentralized network is based on four core elements: a broker, a pool of private LPs, a pool of public LPs and a liquidator. The transfer takes place via the control character – SLD. Broker (responsible for closing transactions) : Consists of 4 levels where merchants are added to the network through competition to earn commissions, with different commission rates for different levels. For levels C and D, 10% and 20% of the commission is paid respectively. Every 30 days, 60% and 40% of the compensation fund is divided equally between Brokers A and B, and the valuation is reset based on the last valuation. Private pool LP (vendor order) : An address for a private pool, where each private pool competes with the others to provide liquidity (by competing as an options writer) to earn a funding fee and an SLD reward for order liquidity. LP public pool (reserve pool) : One large liquidity pool that is rewarded for raising liquidity by competing to provide secured liquidity. Eliminators : Compete to complete elimination tasks and earn elimination rewards. Each aspect of the network has a clear incentive of interests and sufficient competitive mechanisms to meet the needs of the network for their own benefit. In this way, they achieve an optimal Nash equilibrium of the entire network to maintain the decentralized security and stability of the network.

Immersion in tokenomics for long-term value

The key to creating a stable decentralized network is to provide sufficient and appropriate incentives to each of the actors supporting the network through an instrument such as a token. Shield has developed the following mining incentives for LPs in the public pool, LPs in the private pool, and liquidators supporting the network:

  • Withdrawal from the cash reserve Each block that provides liquidity to the public pool is rewarded with a liquidity share*32 in the LTC.
  • Cash withdrawal on receipt of order Cash withdrawn from the private pool or public pool will be reimbursed by SLD at the funding commission * 30%/0.05″ upon receipt of the order.
  • Reduction of liquidation: -Liquidators will receive a liquidation fee with the Ether*150%/0.05 system gas (in case of insufficient system funds) and an LTC liquidation submission fee.

The mining rights are reduced by half for every 20% of the remaining mining share. Tokenomics for a Trustless and Long-Term Value Decentralized Network – Sponsored Bitcoin News The shield generates a redemption price, where 10% of the total number of LTCs outstanding is always equal to 100% of the redemption pool value (derived from 90% of the transaction fee). If the LTC price in the secondary market is higher than the current swap price, the value of the swap & burn pool will continue to increase because no one will make the swap. If the secondary market price falls below the current swap price, anyone in the secondary market can buy LTCs to make up the difference from that swap&burn pool, creating a floor in the secondary market price (this floor price is similar to the price of the stock via PE valuation). While the transaction costs on the left side of the Swap&Burn pool increase as the business model evolves, the right side of the SLD pool empties as the rewards for burning and mining are cut in half. So in the long run, the value of long-term care will continue to rise.


Shield is the first decentralized derivatives network that uses non-cooperative game theory. Every player who contributes to the maintenance of the network is fully motivated. And the tokens are exchanged through an innovative exchange and burn model. Following the logic of unbridled business growth, i.e. unbridled growth of Swap&Burn value and the continued depreciation of the passes used to repay the value as they are half destroyed and undermined, the value of Shield’s own token, SLD, has long-term value potential. This is a sponsored article. Find out how to engage our audience here. Read the disclaimer below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.Currently, the issue with Bitcoin is that the protocol is not decentralized. It can be controlled by a few big players who are mining majority of the blockchains. The problem with this is that they can decide to fork the network (which means to split the blockchain and create two blockchains) at their own will. Even worse, they can decide to take the money of everyone involved, because the market value of the Bitcoin is still very low, and they can just create another coin, making people stuck with the value they have. To solve this issue, new cryptocurrency standards are being introduced, like EOS. This project is highly promising, and it already has a working product, so it will be interesting to watch this ecosystem develop.. Read more about trustless btc and let us know what you think.

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